Question

59. Bob and Sam enter into a contract whereby bob agrees to purchase allo f the widgets that sam manufactures in one years time.

Bob is shocked when sam sends him 30 million widgets at a price of one dollar each.

How can bob avoid having to pay for the 30 million widgets? What is this type of contract called?

Answer 1

This is an example of an Ambiguous Contract, since it is unclear from the terms of the contract the number of widgets that Sam can manufacture in a year, as also the price to be paid per widget, or whether one dollar is U.S. dollar or Canadian dollar.

Ambiguous agreements do not lead to valid contracts, and hence are not enforceable.

Bob can avoid having to pay $ 30 million for the widgets by rejecting the entire shipment. As this is not a valid contract, Sam would not be able to sue Bob for breach of contract.

Another way out would be to rewrite the contract with mutual consent, wherein the terms would be specific and certain, so the revised agreement would be a valid enforceable contract.